Patent Law Practice Center

Foley & Lardner: Senate Introduces Patent Reform Act of 2011

On Tuesday, the Senate introduced the Patent Reform Act of 2011.  While the latest version is similar to previous patent reform bills, there are some significant changes made in the 2011 proposed legislation.  Our friends at Foley & Lardner sent in this alert discussing the new bill and how the House plans to address patent reform in 2011.

On January 25, 2011, Sens. Patrick Leahy (D-Vt.), Orrin Hatch (R-Utah), and Chuck Grassley (R-Iowa) introduced the latest bill on patent reform legislation—the Patent Reform Act of 2011.  According to Sen. Leahy, the new legislation is based on prior legislation introduced during the 109^thCongress, as well as compromises reached in March 2010 (the Managers’ Amendment to S. 515). A January 20, 2011 press release on Sen. Leahy’s Web site states, “[p]romoting economic growth continues to be a top priority for both Democrats and Republicans, and patent reform is part of that effort.” When introducing the bill, Sen. Leahy explained that the new legislation is intended to accomplish three primary goals: (1) transition to a first-to-file system; (2) improve patent quality; and (3) provide more certainty in litigation. The Act also includes provisions to limit standing and damages in false patent marking actions. However, Sen. Leahy did not directly address how he intends to resolve key differences with the House that carry over from last year’s stalled bill (S. 515), which contains many of the same provisions as the new bill. Meanwhile, the House has announced a new hearing that it will conduct on the link between patent reform and job creation, suggesting that it intends to obtain more input before considering legislative changes. Several of the key provisions of the recently introduced Senate bill are discussed in more detail below. (more…)

Court Finds 25 Percent “Rule Of Thumb” To Be A Fundamentally Flawed Patent Damages Tool

Today’s guest post was written by our friends at Foley Lardner, Cynthia J. Franecki and Rebecca J. Pirozzolo-Mellowes.

In Uniloc USA, Inc. v. Microsoft Corp., ___ F.3d ___ (Fed. Cir. Jan. 4, 2011), the Federal Circuit addressed arguments relating to a number of damages issues. Most notably, the Federal Circuit held that the 25 percent rule of thumb often used by damages experts in patent infringement cases “is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation” and “inadmissible under Daubert and the Federal Rules of Evidence.”

Background

United States Patent No. 5,490,216, assigned to Uniloc, relates to “a software registration system to deter copying of software.” Uniloc accused Microsoft of infringing the ‘216 patent. In 2007, the district court granted summary judgment of non-infringement. Specifically, the district court concluded that the algorithm used in Microsoft’s technology was different from that claimed in the ‘216 patent. On appeal, the Federal Circuit reversed and remanded the case. Thereafter, a jury found: (1) the ‘216 patent valid and infringed, and that (2) Microsoft’s infringement was willful. The jury then awarded Uniloc $388 million in damages. Microsoft filed a number of post-trial motions, including a motion for a new trial on damages based on its assertion that Uniloc’s expert improperly relied on the 25 percent rule of thumb and the entire market value rule. The district court granted Microsoft a new trial on damages based on the improper use of the entire market value rule, but rejected Microsoft’s arguments regarding the 25 percent rule. (more…)

Exclusive Interview With Senator Birch Bayh

The following was sent in by Gene Quinn, of IPWatchdog and Practice Center Contributor.

On October 12, 2010, I had the honor of interviewing retired United States Senator Birch Bayh at his office at Venable LLP.  Senator Bayh was the primary architect of the landmark Bayh-Dole Act, which gave Universities the ability to own the patent rights to the inventions made.  The 30th Anniversary of passage in Congress is rapidly approaching, which provided the backdrop for our discussion.

Those familiar with Bayh-Dole and government funded research in generaly know that the United States has for years funded research at Universities.  Prior to the enactment of Bayh-Dole, however,  it was virtually impossible for private enterprises to license the rights to patents obtained through federally funded research. Thus, society was funding the research and the innovations were simply being withheld from the public due to the existence of too much red tape. Bayh-Dole changed everything, and has been described as the “the most inspired piece of legislation to be enacted in America” since the end of World War II. (more…)

Federal Circuit: Foreign Application Not Priority in Interference When it Only “Envisions” Invention

Written by Gene Quinn (of IPWatchdog and Practice Center Contributor)

Last week the United States Court of Appeals for the Federal Circuit issued a ruling in Goeddel v. Sugano, which might be one of a dying breed should patent reform actually pass.  The case dealt with an appeal from an interference proceeding where the Board awarded priority based on a Japanese application.  The Federal Circuit, per Judge Newman, explained that it was inappropriate to say that the Japanese application demonstrated a constructive reduction to practice because the application merely would allow the skilled reader to “envision” the invention covered in the interference count.  If patent reform passes (and yes that could really happen) cases like Goeddel would become a thing of the past, although priority determinations like this one in Goeddel will certainly not go away.

Goeddel was a consolidated appeal from two decisions of the Board of Patent Appeals and Interferences of the United States Patent and Trademark Office in two related patent interference priority contests between the party Haruo Sugano, Masami Muramatsu, and Tadatsugu Taniguchi (together “Sugano”) and the party David V. Goeddel and Roberto Crea (together “Goeddel”).  The Board held that Sugano is entitled to the benefit of the filing date of its initial Japanese application, and awarded Sugano priority as to the counts of both interferences. (more…)

Patent Reform: Fantasy or Reality?

Patent Reform is an issue that has plagued the patent community for quite some time.  Will it actually ever happen or is it eternally on hold?  Surprisingly, the Patent Office and it’s deficiencies have gotten some well deserved attention in the media and in Congress during the last week.  Will this attention actually result in Congressional action on Patent Reform during the fall term?  Two of our Practice Center Contributors, Scott Mckeown and Gene Quinn, have passed along articles discussing the recent events and what if anything it may mean for Patent Reform.

Economy Recovery Platform Paving The Way For Patent Reform?

Written by Scott Mckeown (partner at Oblon Spivak and our newest Practice Center Contributor)

With Congress on summer hiatus, and significant election uncertainty coming in the Fall, Patent Reform efforts are seemingly on hold (again). Still, last week, the USPTO was able to secure an additional $139 million in funding. H.R. 5874 permits the USPTO to retain $139 million in fees collected from patent applications and patent maintenance fees for fiscal year 2010 “salaries and expenses.”

Senator Leahy, a backer of S.515, in passing the new PTO funding bill took the opportunity to emphasize the importance of the this perenially pending legislation, noting that more needs to be done to modernize and improve our patent system, which is a crucial component of our economic recovery… This bill [the S. 515 manager’s amendment] will provide the legal structure we need to allow our inventors to flourish. It will improve our economy and create jobs without adding a penny to the deficit. (more…)